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place an Advanced Clean Cars Program to lower both GHG and particulate emissions from cars and light trucks. Part of the programme includes a Zero-Emission Vehicle (ZEV) programme, which mandates automakers to sell a growing share of ZEVs (which include full battery-electric, hydrogen fuel cell and plug-in hybrid electric vehicles) each year, starting with a 4.5% threshold in 2018 and reaching a 22% share in 2025 (CARB, 2019a). Nine other states (Connecticut, Maine, Massachusetts, Rhode Island, Vermont, New Jersey, New York, Maryland and Oregon) have since adopted ZEV programmes (EIA, 2016). California also offers EV owners a USD 2 500 rebate (designed to favour lower-income buyers) as well as benefits such as access to high-occupancy vehicle lanes. The rebate, which is funded by auction revenues from the state’s cap-and-trade programme, expires when it runs out of funding for a given year (CARB, 2019b).
Other regional programmes
The Western Climate Initiative (WCI) was founded in 2007 as a collaboration among US Western states and several Canadian provinces. In November 2011, WCI established the Western Climate Initiative Inc. to provide technical support to states and provinces trying to implement carbon pricing initiatives. Current members include California and Canadian provinces British Columbia, Quebec, Manitoba and Nova Scotia (WCI, 2019).
The Midwestern Greenhouse Gas Reduction Accord (MGGRA) was established in 2007 by six Midwestern governors, though it never materialised into a regional programme (MGGRA, 2017). Democratic victories in the recent 2018 governors’ races, however, have raised prospects of resurrecting the accord.
Adapting to climate change
Under the Global Change Research Act of 1990, the US Global Change Research Program (made up of various federal agencies) is required to put out a National Climate Assessment at least once every four years. To that end, the administration released the Fourth National Climate Assessment in two volumes in 2017-18, led by NOAA. Volume I provides an overview of the scientific evidence of how climate change is affecting the physical earth system across the United States, while Volume II addresses the impacts of climate change to help decision makers and various stakeholders develop response strategies. The report highlights a number of adverse economic and social impacts from climate change, including inland and coastal flooding, heat waves, wildfires, coastal infrastructure damage, drought and crop failures, and adverse energy and health effects (US GCRP, 2018).
Given the broad geographic footprint of the United States, the impacts of a changing climate will be felt differently across the country. The National Climate Assessment finds that average temperatures have increased by 1.2° Fahrenheit since 1900, with the Western parts of the country experiencing the most rapid warming. Looking ahead, annual average temperatures are expected to increase by a minimum of 2.3° Fahrenheit by mid-century relative to a 1986-2015 baseline, and by a maximum of 11° under a higher scenario. The report also predicts greater intensity of hurricanes, reduced snowpack and water supply in Western states, and rising sea levels in the Northeast and the Gulf of Mexico. Overall, under a scenario in which emissions continue to grow on their current trajectory, the assessment predicts employment costs to the US economy of
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USD 155 billion annually by 2090, mortality costs of USD 141 billion, and coastal property damage of USD 118 billion per year.
The Notre Dame Global Adaptation Initiative Country Index ranked the United States as the 22nd least vulnerable country in the world and 12th most prepared to face climate change impacts. The index indicates that agricultural capacity, the projected change of cereal yields, and the projected change of annual river flows are among the most vulnerable areas to the impacts of climate change in the United States (University of Notre Dame, 2019).
The energy sector of the United States is already affected by climate change and extreme weather across all regions and all energy technologies. Increases in air and water temperatures, increasing probability of heat events, decreasing water availability, sea level rise, and increased storm events are likely to continue affecting the energy sector in the future. Extreme heat events can increase electricity demand while reducing electricity generation capacity and decrease the efficiency of the transmission grid. In particular, the US oil and gas sector has projects and operations in regions of greatest projected temperature rise and impact (e.g. in the Arctic) and potential sea level rise, and operations that demand large volumes of water (e.g. shale gas). Climate impacts can affect exploration, production, transport, infrastructure (terminals, pipelines, refining and processing plants) and neighbouring communities. Upstream, midstream and downstream oil and gas operations and facilities are generally designed to be resilient to historic weather-related events within fence-line operations. Generally, projects are designed with safety factors for one-time extreme weather events (e.g. major flood event). However, climate change has the greatest impact on the industry through the damage caused to communities and disruptions outside of facility fence lines.
A US Government Accountability Office study from September 2017 concluded that the federal government had already incurred costs of over USD 350 billion due to extreme weather and fire events. It noted a 2016 study by the Office of Management and Budget and the Council of Economic Advisers that estimated recurring costs to the federal government of USD 12 billion to USD 35 billion annually by mid-century, and USD 34 billion to USD 112 billion by late century (US Government Accountability Office, 2017).
Led by NOAA, the federal government put in place the Climate Resilience Toolkit website in November 2014 that offers scientific information and recommendations to help states and local communities mitigate the impacts of and respond to extreme weather events (U.S. Climate Resilience Toolkit, 2019). The toolkit includes recommended steps that local governments can take to assess risks as well as to develop a resilience action plan. The toolkit also includes a collection of nearly 200 digital tools, including maps, green infrastructure cost-benefit analyses and agricultural risk mitigation tools, among many others. It also includes a sizeable library of case studies that businesses and communities can use as examples to develop their own plans.
Beyond the federal government, many states and local communities have developed climate adaptation plans, especially coastal areas and those that have already seen an uptick in extreme weather events (see also section on climate change in Chapter 12, “The Resilience of US Energy Infrastructure”).
However, there are still many opportunities to improve the climate resilience of the energy sector in the United States. First, standardised and accepted scenarios for
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climate change’s future impacts and the vulnerabilities of power systems could be developed and used as the basis for infrastructure planning and investment decisions. Moreover, the understanding of climate change impacts on power systems themselves could be improved, as well as their interdependences, for example, as such climate change impacts relate to supply chains and transportation systems. Developing better equipment and facility design standards could also be beneficial, as well as tools to more precisely assess prospective costs and benefits of resilience investments, including assessment of the cost-effectiveness of past resilience investments.
Assessment
From 2005 to 2017, energy-related CO2 emissions fell by 17% due to lower energy demand (in the aftermath of the financial crisis and subsequent economic slowdown), energy efficiency, the shift from coal to natural gas use in power generation, and the steady increase of renewable electricity. The largest emissions reduction happened in power generation, with a decline of 28% below 2005 levels. In 2017, power generation accounted for 38%, and the transport sector for 36%, of total CO2 emissions, according to IEA data. Following the closure of the oldest coal-fired power plants in the past few years, as well as many years of policies controlling local air pollutants, NOx and SOx emissions have also declined.
At the federal level, the National Security Strategy underlines that the United States is pursuing a balanced approach to climate change, which aims at reducing traditional pollution as well as GHGs while expanding the economy. US environmental and climate policies continue to face a lack of bipartisan support and frequent course changes, which exposes regulatory action to legal challenges, and creates significant uncertainty for states and industry alike.
In 2017, the US government decided to withdraw from the Paris Agreement, but remains open to re-engage with the Paris Agreement process on improved terms for the United States. The United States had set a Nationally Determined Contribution to reduce GHG emissions by 26-28% below 2005 levels by 2025.
A core focus for the administration is a policy agenda to reduce the regulatory burden on industry (through Executive Orders 13771, 13777 and 13783 of 2017). Under Executive Order 13783, the EPA was directed to review all existing rules, a process the agency is currently undertaking. Federal agencies have revoked or are in the process of revoking 60 environmental regulations.
The federal government has an obligation to regulate GHG emissions under the Clean Air Act through the EPA, following a Supreme Court ruling in 2007. The administration in June 2019 finalised the ACE rule to replace the previous CPP to address GHG emissions from the power sector. The new rule sets out common emissions guidelines for states to encourage efficiency improvements at existing coal-fired plants. Compared with the CPP, the ACE rule is likely to delay the closure of newer coal-fired power plants and result in far fewer GHG emissions reductions over the next decade (estimates are up to ten times less). Existing EPA rules on mercury, NOx and SOx pollutants have also been under review. EPA decided not to change the SOx/NOx pollution limits.
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The administration in August 2018 announced a new proposal to freeze CAFE standards for light-duty vehicles at the 2021 level through 2026. The proposal, however, has raised controversy over the right of the state of California to maintain more ambitious emissions standards than the ones mandated by the EPA. California has a waiver under the Clean Air Act to set more stringent air pollution standards due to its local air pollution, and 13 states have followed its lead.
Over the last decade, minimum fuel economy standards have stabilised the transport sector‘s energy consumption, after two decades of strong demand growth, and yielded incentives for the automotive industry to develop more efficient internal combustion engines or EVs using batteries and fuel cells. Ambitious fuel economy standards with a long timeline are paramount for a continuation of this trend and for maintaining the competitiveness of the US auto industry in the global marketplace. However, in light of the recently proposed relaxation of CAFE rules, if the United States were to experience continued growth in automobile ownership – especially stronger consumer preferences for larger sport-utility vehicles – along with an uptick in vehicle miles travelled, the United States may see a reversal of energy efficiency gains in transportation, even in a context of growing EV demand.
Since the start of the LTO revolution in the United States, large volumes of associated gas as a by-product of oil production have been either vented or flared as there was little incentive to market the associated gas or build and upgrade the necessary infrastructure needed to transport it. Flaring is particularly prominent in the Permian and Bakken shale oil producing regions. The start of LNG exports has raised the opportunity cost of flaring, and a regulatory push by states has borne results in reducing methane and CO2 emissions. However, the administration’s plans to undo previous federal regulatory action to limit methane from oil and gas production could result in a reversal or slowdown of the recent trend in which methane emissions have been in decline.
Beyond the federal level, a large share of the US climate change policy is driven by state and local action, as well as efforts by the private sector. In response to federal withdrawal from the Paris Agreement, several US states, cities and businesses established the US Climate Alliance in order to continue to engage with the international community on the Paris Agreement. Moreover, a number of states, most notably California, have carbon reduction policies in place, including cap-and-trade programmes. Nonetheless, regional policy action cannot fully replace the importance of national carbon reduction policy.
Looking ahead, current trends suggest that energy-related CO2 emissions in the United States are likely to continue to slowly decline. In the power sector especially, CO2 emissions are likely to decline further with the strong growth of natural gas and renewables, but this trend may slow in the subsequent decade. Faster-than-expected nuclear plant retirements and the continued use of coal could lead to a rebound of emissions in the power sector. The oldest coal plants have retired and the new ones are likely to stay online for longer under new, less onerous environmental rules. Transport emissions are also expected to continue to rise, and the same holds for emissions from increasing industrial activity as well as fugitive emissions from oil and natural gas production.
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